The Central Bank of Nigeria has announced that the naira may continue its positive trend in the foreign exchange market as currency traders were sold US dollars at a more favorable rate on Monday. This news comes after the Apex Bank disclosed a significant inflow into the foreign exchange market, which is part of their strategic plan to stabilize the market.
The naira has been strengthening in the autonomous foreign exchange market, trading at N1,309/$1 on Friday, up from N1,611/$1 in the second week of March 2024. The Bureau De Change (BDC) operators obtained the dollar for N1,251/$ from the Apex Bank in accordance with their commitment in February to sell $20,000 weekly to BDCs for no more than N1,301.
In a post-meeting conference, the bank’s governor, Mr. Olayemi Cardoso, confirmed that the central bank had addressed all confirmed foreign exchange backlogs, suggesting that liquidity in the foreign exchange market would increase. Additionally, in March, the Central Bank increased the country’s interest rate from 22.75% to 24.75%, a move that could potentially impact inflation and lead to job cuts according to private-sector operators.
The governor acknowledged concerns about interest rate hikes but emphasized that with decreasing foreign exchange rates it could help moderate its impact. He expressed optimism that through collaboration with fiscal measures both monetary and fiscal steps are needed to address economic challenges and stabilize exchange rates at sustainable levels.
Overall, this news suggests that there is progress being made towards stabilizing Nigeria’s foreign exchange market and maintaining its competitiveness in global trade.
